Custodia Bank is asking the full Tenth Circuit Court of Appeals to review the US Fed’s decision denying it a master account, which would allow it to process payments directly.
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Custodia Bank, a crypto‑focused bank founded by Bitcoin advocate Caitlin Long, is doubling down on efforts to obtain a master account at the US Federal Reserve by filing a new petition in the United States Court of Appeals for the Tenth Circuit.
On Monday, the Wyoming-chartered company a petition asking all active judges of the Tenth Circuit to upholding the Federal Reserve’s denial of a master account for Custodia.
Through the petition, formally termed a “rehearing en banc,” Custodia argued that the panel had misread the Monetary Control Act, which it asserts entitles any eligible bank to a master account, and in doing so, undermines state banking authority.
“When the Fed denies a master account to a state-chartered financial institution, it effectively vetoes a bank charter that state regulators have approved,” the petition noted, adding that the issue raises “serious constitutional questions” about the Fed’s structure.
Issued by the Fed, a master account allows a financial institution to hold balances directly with the US central bank and access its core payment systems.
For companies like Custodia, having a master account is crucial, as it would enable them to settle payments and clear transactions directly in central bank money, rather than relying on another bank as an intermediary. Without it, they must use correspondent banks to access the Fed’s systems, which can add cost, risk and delay.
“In terms of tiers, a master account is Diamond, bank is Platinum, trust companies are Gold and money transmitter licenses are Silver,” Custodia Bank founder and CEO Long said in an X post in July, adding that Custodia and Kraken are the “only two crypto companies” that are banks.
Custodia has been trying to get a Fed master account since it launched in 2020, but the application in January 2023, and the Federal Reserve also to become a member of the Federal Reserve System.
Related:
Custodia’s long fight for a Fed master account highlights , even though the Trump administration has expressed support for crypto.
In March, the US government had done “nothing” to address crypto debanking issues since President Donald Trump returned to office, highlighting one of the crypto industry’s biggest unresolved challenges.
